2nd Watch Notches Record Q2 Gains

2nd Watch just logged a record second quarter.

The privately-owned, managed services provider, headquartered in Washington state, shared some second-quarter results with CRN Tuesday, which included 400 percent growth in bookings and 300 percent increase in revenue from the year-ago period.

The recent quarter's earnings come on the heels of a similar spike the exclusive Amazon Web Services partner saw in year-over-year bookings and revenue in the first quarter of this fiscal year, Matt Gerber, executive VP of sales and marketing, told CRN.

[ Related: Gartner Magic Quadrant Again Documents AWS Dominance In IaaS]

"We weren't sure if first quarter was an aberration," Gerber said. "With 2nd quarter results there are at least two data points, which seems like the start of a trend."

2nd Watch's growth can be attributed to the company's calculated approach to selling managed cloud services to enterprise clients, the unyielding market strength of the Amazon Web Services platform and the maturation of the industry as a whole, Gerber said.

"I've seen change in the market over the last six to nine months. It's gone from, is it safe enough, secure enough, reliable enough? All of those are gone, and now it's how do I do it?" Gerber said.

The financial services industry provides a good example of those cloud adoption trends.

Half a year ago, 2nd Watch had no engagements in that sector. This month they expect to close three deals with Fortune 500 financial firms.

"If I can't point to data like that, I don't know what I can point to. They are the last folks to look at public cloud," Gerber said of the financial sector, adding, "market pundits were saying it was years out."

But industry trends alone can't account for the entirety of the company's success; 2ndWatch has also demonstrated an effective business strategy to selling cloud services.

The company groups clients into three categories: calculated, market-driven and all-in buyers.

Calculated buyers are testing the waters with a small number of applications well-suited for cloud deployments which they can isolate from the rest of the company's IT infrastructure.

But transitioning those partial users to market-driven buyers with customer-facing applications in the cloud and then to all-in cloud buyers, requires helping the companies rethink major organizational protocols and the skillsets required of their IT staff.

"When you look at what customers are interested in, we talk about moving into the cloud as being a journey. And what we've done right I think that other folks haven't, [is] we've looked at what does it take to get a company or organization to take that first step on the journey, and what does it take to keep taking steps up until that point when they are all in," Gerber said.

2nd Watch was one of two solution providers named in the last Gartner Magic Quadrant for Cloud IaaS report as a partner helping Amazon maintain its dominance over the industry. The company tripled its revenue even as costs for cloud resources declined.

AWS is executing the right strategy to stay on top with the help of its channel, Gerber said.

"They want to make the cloud and cloud components as easy to access as possible. As a partner, they're stepping up the stack with other value-added services, but leaving room for us to continue providing added value to the customer," he said.

PUBLISHED AUG. 12, 2014